Shops and educational institutions around the town in Sivaganga district were closed for some time as the smoke caused suffocation and eye irritation among the public, Superintendent of Police Ashwin Kotnis said.
Some workers of the factory also experienced suffocation, but none were hospitalised.
Traffic on the road, where the 35-year-old Tamil Nadu Chemicals Products Ltd--a factory manufacturing dyeing substance and sulphuric acid is located, was also suspended for some time.
Factory officials said there was a "minor problem" in a machine and the manufacturing plant was closed after the incident for maintenance.